The BoE cut the repo rate by 50 bp to 1.50% in line with expectations. In the statement accompanying the announcement, the central bank said that it expects inflation to fall further and that today's rate cut was justified as the MPC sees a "significant risk" of inflation undershooting 2% in the medium term. The central bank noted that measures of business and consumer confidence has fallen markedly, but saw that the Sterling depreciation could help to moderate the global growth slowdown on U.K. net exports. Gilt futures have knee-jerked on the release, with the March 10-year contract temporarily dipping down towards 121.10 as somewhat more than a 50 bp rate cut was prices in by the market, but quickly recovered back up to 121.23 and versus 121.38 just prior to the announcement. Meanwhile, British Pound rallied after BoE cut rates by 50 bp, which was inline with expectation to leave the repo at an historical low of 1.50%. Cable traded up to 1.5150 and EUR-GBP is trading close to 0.8960 after it broke down following the initial volatility between 0.8980 and 0.9030. There was clearly some disappointment by sterling shorts that the BoE did not cut rates more aggressively. The Bank said that easier policy and a weaker pound provided considerable stimulus and may indicate that the Bank is moving towards the outer limits of its easing cycle. There are plenty of sellers on strength, but EUR-GBP repositioning and Cable's inability to trade below 1.4375 could be indicative of base building ahead of the psychological 1.4000 level. Speculative account may be tempted to force a run on Wednesday's 1.5280 highs, while EUR-GBP technicals point to 0.8900 handle and support levels at 0.8825-0.8855.